What are the Chances of Winning the Lottery?

      Six lottery balls on a white reflective table

With the Powerball jackpot approaching the $1.5B, friends, family, and coworkers are all in a lottery craze. The odds of winning the jackpot is 1 in 292,201,338. At $2 a lottery ticket, simple math suggests that a jackpot of at least $584,402,676 would yield a break even expected return. But the world is not that simple and straightforward. In this article, it accounts for various factors such as tax, multiple winners, lump sum discount, and non – jackpot prizes. The jackpot has to be at least $2.3B for the expected value of a $2 ticket to break even. It’s rare that the jackpot exceeds $1B. The odds are very much in favor of the lottery company but yet for that hope of an overnight fortune, people are still willing to take chances.

Another interesting phenomenon is that people tend to be biased towards winning the lottery versus the probability of unfortunate life events. Here is a table that shows a list of events that have a higher likelihood of happening than the lottery.

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Powerball Odds

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